The Stevia Dilemma: Will Coca-Cola Life and Pepsi True Damage Perceptions of the Natural Sweetener?

Amidst the much-publicised decline of both regular and reduced sugar carbonates, The Coca-Cola Co and PepsiCo have plans to launch stevia-based cola carbonates (Coca Cola Life and Pepsi True) in the US. Both companies have had mixed results with similar launches in other markets, but they hope US consumers will be drawn back to cola carbonates via the use of this low-calorie natural sweetener. While these products address consumer concerns about the usage of artificial sweeteners, the issue for mid-calorie carbonates remains the same: why should consumers choose this reduced calorie product when it does not taste the same as the original and contains more calories than their zero calorie counterparts? By continuing to promote these mid-calorie carbonates as having the same taste as full caloric cola carbonates, both companies risk damaging the value of stevia-based drinks by failing to live up to this promise. Instead of focusing on like-for-like comparisons, using stevia in new non-cola carbonates or other beverages could help consumers become more acclimated to its taste as well as discover new flavours amidst the ever broadening soft drinks industry.

Natural not enough

As explored in Can Stevia Save Low-Calorie Colas?, stevia-sweetened Coca-Cola Life faced many challenges as it prepared to launch in the UK earlier this year. Chief amongst these concerns was the fact that the stevia-sweetened beverage comes “close, but not quite” in terms of mimicking the taste of regular cola carbonates and fails to deliver a significant reduction in calories when compared to most low-calorie cola carbonates. The fact that stevia is extracted from a natural ingredient is an improvement for consumers concerned about artificial sweeteners, but this fact alone is not likely to be enough to have a significant impact on the carbonates category. Instead, as discussed, carbonates manufacturers should “innovate, rather than replicate” and promote their other soft drinks products amidst rising consumer demand for variety.

But, despite limited success in test markets, both Coca-Cola and PepsiCo intend to launch stevia-sweetened cola carbonates in the US. Given the sharp decline in sales of both regular and low-calorie cola carbonates in recent years, it is little wonder that both companies would seek to employ any available technologies to reverse the course for their respective Coke and Pepsi brands. On paper, the stevia would seem to be the ideal solution: an all-natural low-calorie sweetener to assuage consumer scepticism about artificial sweeteners. But the limitations of stevia, particularly its inability to deliver in terms of calorie reduction (both Coca-Cola Life and Pepsi True reduce calories by only 30%) and taste, may actually damage the natural sweetener’s standing with consumers, rather than lift cola carbonates back to prominence.

Volume Sales of US Cola Carbonates: 2003-2013

Source: Euromonitor International

Let stevia stand on its own

Prior to the 2013 launch of Coca-Cola Life in Argentina and the 2012 launch of Pepsi Next in Australia, stevia was primarily used in fruit-flavoured products. The sentiment was that the citrus flavours of the juice would mask the bitter aftertaste of stevia. PepsiCo launched Tropicana Trop 50– a reduced calorie orange juice – in the US and Coca-Cola reformulated lemon-lime carbonate Sprite with stevia to similarly lower calories in the UK and France. Coca-Cola attempted a similar manoeuvre with VitaminWater in the US, but consumer backlash against the taste of the new formulation saw the company quickly reverse course.

The fact of the matter is that stevia-sweetened products simply taste different from soft drinks sweetened with sugar or high fructose corn syrup. Cola carbonates in particular do little to mask these tastes. Despite PepsiCo’s most recent announcement of Pepsi Life, the company’s CEO Indra Nooyi told analysts at the Sanford Bernstein Strategic Decisions Conference that “stevia unfortunately does not work well with colas”.

While that assessment is debatable, the deeper problem is that both companies are continually trying to use low-calorie sweeteners to mimic full flavoured soft drinks, rather than launching new flavours with stevia as their base. Without a full-caloric product from which to draw comparisons, a stevia-sweetened product could be judged on its own merits and taste. Whether stevia tastes best with citrus flavours or something else entirely, at the very least, consumers would not continually draw comparisons with flavours to which they have already grown accustomed.

More harm than good

By continually using stevia as a sugar replacement in established brands, stevia has little chance of succeeding. Despite its all-natural properties, it is not the panacea that will instantly cure all the ills of sugary soft drinks because it simply cannot replicate the taste of full-flavoured beverages. That said, there is plenty of value in an all-natural low-calorie sweetener, particularly as consumer demand for natural products increases. Furthermore, the recent success of products like Kraft’s MiO, PepsiCo’s Mtn Dew Kickstart and even Coca-Cola’s Freestyle machines indicate that consumers care more about flavour or function than mere product formulation. So, by experimenting with stevia in new flavours and brands, Coca-Cola and PepsiCo would put taste at the forefront, with low-calories via natural sweeteners as an added bonus.